NEW YORK, April 6, 2009 (GLOBE NEWSWIRE) -- Allianz Global Investors Fund Management LLC ("AGIFM"), investment manager to PIMCO Municipal Income Fund (NYSE:PMF), PIMCO California Municipal Income Fund (NYSE:PCQ), PIMCO New York Municipal Income Fund (NYSE:PNF), PIMCO Municipal Income Fund II (NYSE:PML) , PIMCO California Municipal Income Fund II (NYSE:PCK), PIMCO New York Municipal Income Fund II (NYSE:PNI), PIMCO Municipal Income Fund III (NYSE:PMX), PIMCO California Municipal Income Fund III (NYSE:PZC), and PIMCO New York Municipal Income Fund III (NYSE:PYN) (each a "Fund" and collectively, the "Funds"), announced today that each Fund's investment policy has been revised to increase the amount of Residual Interest Municipal Bonds ("RIBs") in which a Fund may invest to 15% from 10% of its total assets, effective immediately. The Board of Trustees approved the changes based on a recommendation from AGIFM and the Funds' sub-adviser, Pacific Investment Management Company LLC ("PIMCO"), that this limit increase in RIBs would be in the best interest of the Funds and the Funds' shareholders.
This change potentially allows the Funds to earn additional tax free income. In addition, the use of RIBs, which results in a form of economic leverage, will allow the Funds, including those that redeemed a portion of their auction rate preferred shares, to replace or increase leverage to some degree.
In addition to general market risks, the Funds' investments in RIBs may involve greater risk and volatility than an investment in a fixed rate bond, and the value of RIBs may decrease significantly when market interest rates increase. RIBs have varying degrees of liquidity, and the market for these securities may be volatile. These securities tend to underperform the market for fixed rate bonds in a rising interest rate environment, but tend to outperform the market for fixed rate bonds when interest rates decline or remain relatively stable. Although volatile, RIBs typically offer the potential for yields exceeding the yields available on fixed rate bonds with comparable credit quality, coupon, call provisions and maturity. Trusts in which RIBS may be held could be terminated due to market, credit or other events beyond the Funds' control, which could require a Fund to reduce leverage and dispose of portfolio investments at inopportune times and prices.
The investment objective of each Fund is to provide current income exempt from federal income tax. PIMCO California Municipal Income Fund, PIMCO California Municipal Income Fund II and PIMCO California Municipal Income Fund III also seek to provide current income exempt from California state income taxes. PIMCO New York Municipal Income Fund, PIMCO New York Municipal Income Fund II and PIMCO New York Municipal Income Fund III also seek to provide income exempt from New York State and city income taxes. There can be no assurance that the Funds will meet their objectives.
Allianz Global Investors Fund Management LLC, an indirect, wholly-owned subsidiary of Allianz Global Investors of America L.P., serves as the Funds' investment manager and is a member of Munich-based Allianz Group (NYSE:AZ). Pacific Investment Management Company LLC, an Allianz Global Investors Fund Management affiliate, serves as the Funds' sub-adviser.
The Funds' daily New York Stock Exchange closing prices and net asset values per share are available by calling the Funds' shareholder servicing agent at (800) 331-1710. This information, as well as updated portfolio statistics and performance, is available at http://www.allianzinvestors.com.
Statements made in this release that look forward in time involve risks and uncertainties and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such risks and uncertainties include, without limitation, the adverse effect from further declines in the securities markets and in the Funds' performance, a general downturn in the economy, inability to obtain leverage to replace ARPS that have been redeemed, competition from other companies, changes in government policy or regulation, inability to attract or retain key employees, inability to implement their operating strategy and/or acquisition strategy, and unforeseen costs and other effects related to legal proceedings or investigations of governmental and self-regulatory organizations. The Funds' ability to maintain leverage and to pay dividends to common shareholders is subject to the restrictions in their registration statements, By-laws and other governing documents as well as the Investment Company Act of 1940.